Lebanon passes tax law on oil revenue

Lebanon’s parliament approved a tax law on oil revenues just as exploration and production companies prepare to bid on the first round of offshore exploration licences next month.

The draft law called for a 20 percent income tax on petroleum operations, along with a stamp-duty fee fixed at 5 million Lebanese pounds ($3,311), Wissam Zahabi, a member of the Lebanese Petroleum Administration said to Bloomberg.

Earlier this month, Lebanon’s Energy and Water Minister Cesar Abi Khalil extended by four weeks the deadline for companies to submit bids for exploration and production to Oct. 12.

The energy ministry extended the deadline from Sept. 7 to allow time for ratifying the law, and based on requests from some companies. The new legislation includes taxing the profits of companies that take part in exploration and production.

The bids will abide by the new tax law that was approved on Sept. 19 and the government will publish the details of the law, Abi Khalil said on Twitter.

Bidding will be held for offshore blocks 1, 4, 8, 9 and 10.

Exxon Mobil, Chevron Corp., Royal Dutch Shell Plc and Eni SpA are among almost 50 companies that qualified in 2013 to bid to operate blocks.

Lebanon re-opened its first licensing round in January after a three-year delay, hoping to revive development of a hydrocarbon industry that political paralysis had stalled.

Lebanon sits on the Levant Basin in the eastern Mediterranean, along with Cyprus, Egypt, Israel and Syria, where a number of gasfields have been discovered since 2009.